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Surge hopes dashed for electronic, IT industries   2008-08-25 - SGTT

 
Customers select TVs at the Nguyen Kim Commercial Center in HCMC. Sales of electronic and IT products have remained low in the rainy season despite retailers reducing prices by 2-5 percent.  
With market predictions gone awry and the currency exchange rate belying expectations, importers and retailers of electronic and IT products have revised their outlook for the rest of the year from rosy to gloomy.

 

 

Lien An Thach, sales manager of Cho Lon Electronics supermarket chain, says it has become difficult to predict the movements of the market.

After achieving great sales in the first quarter, many businesses had forecast a 25 percent annual increase in sales for 2008.

However, some retail outlets have reported a steep drop in sales – from 30-50 percent – compared with figures for last year until mid-August.

The highest drop has been recorded in electrical appliances, followed by computer products and mobile phones.

Importers, meanwhile, have had to deal with a drop in the value of dong up to almost VND20,000 to the dollar in mid June.

While some had no choice but to receive the goods ordered, others bought a large amount of goods to keep in stock, fearing that the exchange rate would continue to surge.

But then the dong started strengthening at the end of last month.

The director of an import business, who wished to be unnamed, says his business has suffered great losses over this period because of the fall in the dong exchange rate and competition from new imports at lower prices.

Many importers now can’t sell the products they stocked earlier, says To Hong Trang, sales manager of Digiworld Corporation.

Sales have remained low in the rainy season despite the retailers reducing prices by 2-5 percent.

Distributors say they have stocks worth VND500 billion (US$30.25 million), but in order to get discount rates from manufacturers and to stay in the competition, they have to import newer models.

With the stockpiles growing, retailers in Ho Chi Minh City have decided to launch many promotion campaigns this month.

They hope to clear as much of the stock as possible by the end of September so that they are ready to purchase new products before the shopping season for the New Year begins.



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